REG - SpaceandPeople PLC - Interim results - 6 months ended 30 June 2024
23/09/2024 07:00
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RNS Number : 1385F SpaceandPeople PLC 23 September 2024
23 September 2024
SpaceandPeople plc
("SpaceandPeople" or the "Group")
Interim results for the six months ended 30 June 2024
SpaceandPeople (AIM:SAL), the retail, promotional and brand experience
specialist which facilitates and manages the sale of promotional and retail
merchandising space in shopping centres and other high footfall venues,
announces its interim results for the six months ended 30 June 2024.
Highlights
Financial
o Group revenue up 35% to £2,929k (H1 2023: £2,173k) with increased
revenue in all divisions, leading to an increase in gross profit of 41% to
£2,350k (H1 2023: £1,671k).
o Improvement in H1 loss after tax of 47% to £185k (H1 2023: £351k). This
is driven by a 41% increase in gross profits, partially offset by a 23% rise
in administration expenses, the majority of which relates to additional staff
costs following a growth in headcount to drive revenue growth.
o Improved net cash outflow from operating activities to £939k (H1 2023:
£1,058k) due to lower operating losses than in H1 2023.
o Net bank debt as at 30 June 2024 has decreased by 47% to £402k (30 June
2023: £763k), with further bank debt repayments of £322k since 30 June 2023
giving gross bank debt at 30 June 2024 of £997k (30 June 2023: £1,319k).
Operational
o Strong UK promotional sales driven by significant increase in Brand
Experience bookings.
o Continued roll out of Rock Up and Pop Up kiosks in the UK and also in
Germany.
o Successfully tendered for a new 5 year contract with Network Rail until
September 2029 and a new contract with Southeastern Trains for a similar
period.
o Renewal of German retail agreement with ECE until 2029.
o Growth in German retail division with average number of kiosks in
operation increasing to 115 during H1 2024 (H1 2023: 95).
o Resumption of promotional business in Germany with a view to expanding
this in 2025 and beyond.
Contact details:
SpaceandPeople Plc 0845 241 8215
Nancy Cullen, Gregor Dunlay
Zeus (Nominated Adviser and Broker) 0203 829 5000
David Foreman, Ed Beddows
Chief Executive's Interim Operating Statement
I am delighted to report that the Group performed very well in the first half
of 2024, with all divisions, both in the UK and Germany, continuing to show
strong growth, with our new products and services producing encouraging year
on year increases, reinforcing the unique selling points of the SpaceandPeople
platform and service.
Overall, revenue grew by 35% compared with H1 2023, with the UK Brand
Experiential business performing particularly well, where despite a slow start
to the year, the revenue achieved in the second quarter was at record levels
for our business. We also delivered strong revenue growth in Germany, driven
by a further expansion in the number of kiosks in operation.
This growth in revenue helped to deliver a 41% increase in gross profit, a 50%
reduction in the loss before taxation.
UK Trading
Kiosks
The UK Kiosk division reported increased revenue, driven mainly by the
continued roll out of Rock Up and Pop Up ("RUPU") kiosks. These kiosks have
been particularly well received by retail landlords and we have been
successful in launching them in a number of the country's most prestigious
venues. It is very encouraging that given the considerable investment in
design, manufacturing and installation to meet the quality requirements of
landlords, these kiosks are trading well and form a key part of our retail
strategy moving forward.
RUPU is a unique service offered by SpaceandPeople and is aimed at nascent,
online or expanding retail chains who want to trial physical retail in any
enclosed shopping centre in the UK. The service, which offers a fully bespoke
designed kiosk, merchandising, marketing and, if required, staffing has been
welcomed by a wide variety of retailers from Kate Spade, who utilised the
kiosk in Westfield London and St Pancras, to new retailers such as Just Bee
(now in 5 shopping centres UK wide) and Ishvari (an ex John Lewis scarves and
accessories concessionaire) who, having traded on a RUPU kiosk, have now
invested in their own mid mall kiosk.
Our Mobile Promotions Kiosks units also form part of the revenue for this
sector and, whilst this business continues to perform to budget, it should be
noted that we do not see the customer acquisition sector as a significant
driver for the business moving forward.
Promotions
As stated previously, the main driver of growth in the UK promotions division
was brand experience activations. This revenue stream enjoyed an unprecedented
end to 2023, however, this was followed by a relative lull in bookings in the
first quarter of 2024. This seems to have become a trend in the industry and
we are mindful of this when setting our budgets and expectations. However,
following this quieter period, business rebounded very quickly in Q2 and in
June we recorded our best ever brand experience sales, with a multitude of
activations across both indoor and outdoor venues including brand activations
for Samsung, Chanel, Tesla and many others.
Business continues to look positive for this division although our sight of
the pipeline beyond the next 2 to 3 months is always difficult to predict and
therefore forecasting for the critical end of year period can be challenging.
We continue to invest in innovation to secure and grow our market and in Q1
2024 we launched CORE (the Campaign Optimiser for Retail and Experiential).
This web-based platform has been developed in conjunction with leading brand
agencies and in association with industry representatives from the Institute
of Promotional Marketing (IPM).
By using CORE, campaign managers, agencies, and brands can gain access to
comprehensive insights gleaned from live experiential, sampling and pop up
retail activations, including footfall analysis, sample distribution metrics,
sign-up rates, and category preferences. Agencies are invited to submit data
on an on-going basis via CORE ensuring that the data is always current.
Our retail division continues to play an important role in the business and we
have seen some interesting new concepts taking mall space during the year
including new offers from challenger optician brands and fragrance retailers.
We are also seeing growth in outdoor activity from retailers looking to place
service offers in retail parks and from leisure operators seeking large
outdoor spaces to place ticketed activities such as circuses.
German and other European Business
The German business continues to perform well under the new contract with ECE
and had a good start to the year, operating from an average 115 kiosks across
Germany during H1 2024 (H1 2023: 95 units). We took the decision to add to the
team in 2024 to enable us to book brand experiences into German venues in
addition to our pop up retail offer so costs are slightly higher than
anticipated as revenues will take some time to build.
It is our intention to continue to take steps to expand the business beyond
the German borders and we have now successfully booked retailers into shopping
centres in Austria, France and Luxemburg.
Outlook
Since the half year end, we received the fantastic news that we have retained
the contract with Network Rail for a further 5 year period and we have added
Southeastern train stations too. Network Rail is an important account for
SpaceandPeople and supports our dominance in the brand experience market. This
win, combined with the innovative approach that we are taking to developing
new physical retail business, our new insights platform and our outreach into
European venues beyond Germany means that the company is in good shape to
continue to develop and grow. This summer has seen a real increase in interest
in experiential campaigns and we therefore hope for a strong Q4 in this
sector.
I am, as ever, incredibly grateful to the hard working teams in the UK and
Germany, that have delivered these sales. Our results would not be possible
without the support of the teams in finance, venue management, operations,
compliance and marketing, working closely with our committed and talented
sales executives and managers.
Nancy Cullen
Consolidated Group Statement of Comprehensive Income
For the six months ended 30 June 2024
Notes 6 months to 30 June '24 6 months to 30 June '23 12 months to 31 December '23
(Unaudited) (Unaudited) (Audited)
Restated £'000
£'000 £'000
Revenue 4 2,929 2,173 5,840
Cost of sales (579) (502) (1,071)
Gross profit 2,350 1,671 4,769
Administration expenses (2,627) (2,138) (4,771)
Other operating income 126 112 241
Operating (loss) / profit (151) (355) 239
Finance costs (59) (69) (136)
(Loss) / Profit before taxation 4 (210) (424) 103
Taxation 25 73 45
(Loss) / Profit after taxation (185) (351) 148
Other comprehensive income
Foreign exchange differences on translation of foreign operations (7) (5) 2
Total comprehensive (loss) / profit for the period (192) (356) 150
Earnings per share 10
Basic (9.7)p (18.4)p 7.8p
Diluted (9.7)p (18.4)p 7.1p
Consolidated Group Statement of Financial Position
As at 30 June 2024
Notes 30 June '24 30 June '23 31 December '23
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Assets
Non-current assets:
Goodwill 5 5,381 5,381 5,381
Property, plant & equipment 6 516 469 560
Deferred tax 275 281 250
6,172 6,131 6,191
Current assets:
Trade & other receivables 2,130 1,937 1,799
Cash & cash equivalents 7 595 556 1,872
2,725 2,493 3,671
Total assets 8,897 8,624 9,862
Liabilities
Current liabilities:
Trade & other payables 4,610 4,227 5,144
Lease liabilities 162 190 204
Borrowings repayable within one year 8 322 322 322
5,094 4,739 5,670
Non-current liabilities:
Lease liabilities 113 192 149
Borrowings repayable after one year 8 675 997 836
788 1,189 985
Total liabilities 5,882 5,928 6,655
Net assets 3,015 2,696 3,207
Equity
Share capital 9 195 195 195
Share premium 4,868 4,868 4,868
Special reserve 233 233 233
Own shares held (50) (50) (50)
Retained earnings (2,231) (2,550) (2,039)
Total equity 3,015 2,696 3,207
Consolidated Group Statement of Cash Flows
For the six months ended 30 June 2024
Notes 6 months to 30 June '24 6 months to 30 June '23 12 months to 31 December '23
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash flow from operating activities
Cash (outflow) / inflow from operations (880) (989) 828
Interest paid (59) (69) (136)
Taxation - - 3
Net cash (outflow) / inflow from operating activities (939) (1,058) 695
Cash flows from investing activities
Purchase of property, plant & equipment 6 (79) (28) (214)
Net cash (outflow) / inflow from investing activities (79) (28) (214)
Cash flows from financing activities
Bank loans repaid 8 (161) (161) (322)
Payment of finance lease obligations (98) (82) (172)
Net cash outflow from financing activities (259) (243) (494)
(Decrease) / increase in cash and cash equivalents (1,277) (1,329) (13)
Cash at beginning of period 1,872 1,885 1,885
Cash at end of period 7 595 556 1,872
Reconciliation of operating loss to net cash flow from operating activities
Operating (Loss) / Profit (151) (355) 239
Depreciation of property, plant & equipment 143 148 309
Effect of foreign exchange rate moves (7) (5) 2
(Increase) / decrease in receivables (830) 587 725
(Decrease) / increase in payables (35) (1,364) (447)
Cash flow from operating activities (880) (989) 828
Consolidated Group Statement of Changes in Equity
For the six months ended 30 June 2024
Share capital Share premium Special reserve Own Shares Held Retained earnings Total equity
Six months to 30 June '24 £'000
£'000 £'000 £'000 £'000 £'000
At 1 January '24 195 4,868 233 (50) (2,039) 3,207
Foreign currency translation - - - - (7) (7)
Loss for the period - - - - (185) (185)
At 30 June '24 195 4,868 233 (50) (2,231) 3,015
Share capital Share premium Special reserve Own Shares Held Retained earnings Total equity
Six months to 30 June '23 £'000
£'000 £'000 £'000 £'000 £'000
At 1 January '23 195 4,868 233 (50) (2,194) 3,052
Foreign currency translation - - - - (5) (5)
Loss for the period - - - - (351) (351)
At 30 June '23 195 4,868 233 (50) (2,550) 2,696
Notes to the financial statements
For the six months ended 30 June 2024
1. General information
SpaceandPeople plc is a limited liability company incorporated and domiciled
in Scotland (registered number SC212277) which is quoted on AIM (ticker: SAL).
This condensed consolidated interim financial information has been reviewed,
but not audited, by the auditors, and their independent review is set out
earlier in this report. It does not constitute statutory accounts as defined
by Section 434 of the Companies Act 2006. The financial information for the 12
months to 31 December 2023 has been extracted from the statutory accounts for
that period. These published accounts were reported on by the auditors without
qualification or an emphasis of matter reference and did not include a
statement under section 498 of the Companies Act 2006 and have been delivered
to the Registrar of Companies.
This condensed consolidated interim financial information was approved by the
board on 20 September 2024.
2. Basis of preparation
This condensed consolidated interim financial information for the six months
ended 30 June 2024 has been prepared in accordance with IAS 34 'Interim
financial reporting'. The condensed consolidated interim financial information
should be read in conjunction with the financial statements of the Group for
the period ending 31 December 2023 which were prepared on a going concern
basis under the historical cost convention in accordance with International
Financial Reporting Standards (IFRS) as adopted by the UK, and those parts of
the Companies Act 2006 applicable to companies reporting under IFRS.
3. Accounting policies
The accounting policies adopted in the preparation of the condensed
consolidated interim financial information are consistent with those applied
in the financial statements of the Group for the year ended 31 December 2023.
Going Concern
The Directors are required to prepare the statutory financial statements on
the going concern basis unless it is inappropriate to presume that the Group
will continue in business. In satisfaction of this responsibility the
Directors have considered the Group's ability to meet its liabilities as they
fall due.
The Group meets its day-to-day cash requirements through working capital
management and the use of existing bank overdrafts and loans. Management
information tools including budgets and cash flow forecasts are used to
monitor and manage current and future liquidity.
The current and future financial position of the Group, including its cash
flows and liquidity, continue to be reviewed by the Directors. They take a
prudent view of the Group's business in light of current inflationary and
other macroeconomic factors impacting on the business, its customers and
suppliers. They have also considered the Group's ability to withstand the loss
of key contracts and any mitigating actions that would be available to them.
The Group has term loans in place that mature in 2025 and 2027 along with
overdraft facilities available until 2025. Financial covenants are in place
that reflect the current and budgeted trading position and the Directors are
confident of renewing the overdraft facilities in the normal course of
business.
The Group continues to manage its cash flows prudently and the Directors are
confident that the current resources and available funding facilities will
provide sufficient headroom to meet the forecast cash requirements whilst
remaining within its financial covenants.
As such, the Directors consider that it is appropriate to prepare the
financial statements on the going concern basis.
4. Segmental reporting
The Group splits its business into two main areas, being promotions and
retail. The retail business is further sub-divided into both UK and German
territories. The Group maintains its head office in Glasgow and has a
subsidiary office in Hamburg, Germany. The Group has determined that these,
along with head office functions, are the principal operating segments as the
performance of these segments is monitored separately and reviewed by the
Board.
The following tables present revenues and loss/profitability regarding the
Group's two core business segments - Promotional Sales and Retail, split by
geographic area, after licence fees and management charges made between Group
companies.
UK Promotions UK Kiosks German Head Group
Kiosks Office
£'000 £'000
£'000 £'000 £'000
Six months to 30 June '24
Segment revenue
- Agent 1,780 88 - - 1,868
- Principal - 70 991 - 1,061
1,780 158 991 - 2,929
Segment (loss) / profit before tax 365 132 (9) (698) (210)
Six months to 30 June '23
Segment revenue *
- Agent 1,268 58 - - 1,326
- Principal - 46 801 - 847
1,268 104 801 - 2,173
Segment profit / (loss) before tax 174 (52) (36) (510) (424)
12 months to 31 December '23
Revenue
- Agent 3,490 289 - - 3,779
- Principal - 231 1,830 - 2,061
3,490 520 1,830 - 5,840
Segment profit / (loss) before tax 755 520 124 (1,296) 103
Note: * Revenue restated in accordance with the revised revenue recognition
policy explained in note 3 of the financial statements of the Group for the
year ended 31 December 2023.
5. Goodwill
30 June '24 30 June '23 31 December '23
Net book value £'000 £'000 £'000
Opening and closing balance 5,381 5,381 5,381
6. Property, plant and equipment
30 June '24 30 June '23 31 December '23
Net book value £'000 £'000 £'000
Opening balance 560 545 545
IFRS16 Lease additions 20 44 110
Additions 79 28 214
Disposals - - (189)
Depreciation (143) (148) (120)
Closing balance 516 469 560
The right of use lease liabilities are secured against the right of use
assets.
7. Cash & cash equivalents
30 June '24 30 June '23 31 December '23
£'000 £'000 £'000
Cash at bank and on hand 595 556 1,872
8. Borrowings
At the reporting date the Group had the following borrowings:
30 June '24 30 June '23 31 December '23
£'000 £'000 £'000
Bank loans:
Less than one year 322 322 322
Greater than one year 675 997 836
997 1,319 1,158
As at 30 June 2024, SpaceandPeople plc had £1.0 million (2023: £1.3 million)
of CBILS term loans, £0.2 million of which expire in April 2025 and £0.8
million expire in January 2027. SpaceandPeople plc also had £0.75 million of
overdraft facilities of which £nil was used as at 30 June 2024 (2023: £nil).
The bank facilities are secured by floating charge over the Group's assets and
are subject to interest between 3.25% to 3.8% plus base. The Group's CBILS
term loans are subject to annual and quarterly rolling covenant tests based on
EBITDA performance and the right to defer settlement of the balances disclosed
as greater than one year subject to compliance with these covenants.
9. Called up share capital
Allotted, issued and fully paid 30 June '24 30 June '23 31 December '23
Class Nominal value
Ordinary 10p £ 195,196 195,196 195,196
Number 1,951,957 1,951,957 1,951,957
10. Earnings per share
Earnings per share (EPS) has been calculated using the loss / profit after
taxation attributable to owners of the company for the period and the weighted
average number of shares in issue.
30 June '24 30 June '23 31 December '23
£'000 £'000 £'000
(Loss) / profit after tax for the period (185) (351) 148
Weighted average number of shares in issue during the period
'000 '000 '000
- Number of shares in issue during the period 1,902 1,952 1,902
- Impact from purchase of own shares on - (50) -
28 September 2022
- Weighted average number of 10p ordinary shares 1,902 1,902 1,902
- Weighted average number of share options 195 182 182
- Weighted average number of diluted ordinary 10p shares 2,097 2,084 2,084
There are share options outstanding as at the end of each period which, if
exercised, would increase the number of shares in issue. However, in the
periods to June '24 and June '23, there is an anti-dilutive effect and as such
the effects of anti-dilutive potential ordinary shares are ignored in
calculating diluted EPS.
Nancy Cullen, Gregor Dunlay and Andrew Keiller will present the interim
results to retail investors via Investor Meet Company (IMC) on Monday, 23
September 2024, at 2:15pm.
The meeting is open to all existing and potential shareholders. Questions can
be submitted before the event through the IMC dashboard or at any time during
the presentation.
Investors can sign up to Investor Meet Company for free, follow SpaceandPeople
and gain access to the meeting
via: https://www.investormeetcompany.com/spaceandpeople-plc/register-investor
(https://www.investormeetcompany.com/spaceandpeople-plc/register-investor)
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